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Arts, Culture & Heritage Minister Maggie Barry said on Friday the Government would put $12 million into a contestable new fund over the next 4 years to support retention of built heritage.

The Property Council called it “underwhelming”.

Ms Barry said at the launch in Feilding the heritage earthquake upgrade incentive programme fund (Heritage EQUIP) would support the cost of strengthening privately owned heritage buildings: “We don’t want to see valued buildings empty & deteriorating, or even demolished, because it isn’t economical to strengthen them. This new fund will support owners to preserve our built heritage for future generations.

“Applicants to the fund will need to look to match Heritage EQUIP funding with local government, philanthropic, community & their own contributions. We will be setting up an expert advisory panel to assess applications, which will open in the New Year.”

The fund will be available for all privately owned category 1 Heritage NZ-listed buildings and for category 2 listed heritage buildings in areas of high to medium seismic risk such as Manawatu & Wellington.

Ms Barry said the Ministry for Culture & Heritage and Ministry of Business, Innovation & Employment would develop a comprehensive information package in the next few months, providing guidance to heritage building owners on how to manage strengthening projects.

Property Council: “We want a comprehensive scheme, not enough for a handful”

Property Council chief executive Connal Townsend said: “The fund is a very welcome but underwhelming development. $3 million/year over the next 4 years will only be enough for a handful of buildings. In cities like Dunedin or Whanganui, we have hundreds of earthquake-prone buildings built well over 100 years ago. The economic viability of these cities hinges on either strengthening these buildings or allowing owners to demolish & replace them with modern & safe buildings.”

Mr Townsend said a number of councils understood the issue and were providing leadership: “Wellington City Council provides financial levers & incentives for earthquake strengthening. The approach taken by the council with its rates remission policy & building consent subsidy is helpful in providing some financial relief when strengthening buildings.

“Yet, what we are missing is a joint approach by government & councils in meeting the challenge of earthquake strengthening. A lot more needs to be done in this space. What people tend to forget is that commercial property is a key driver of economic & social prosperity in our towns & cities”.

He said the Property Council had been advocating for years for the Government to provide assistance to all building owners to earthquake-strengthen because of the high risk to public safety and affordability constraints: “We prefer a more comprehensive scheme, such as making earthquake strengthening costs tax deductible. That’s a much fairer system and allows for many more earthquake-prone buildings to be made safe.

“It is unclear how the advisory panel will prioritise buildings for strengthening – whether it will be purely on heritage value or if it will also look at life safety, technical feasibility & affordability issues.”

“A number of Property Council members have extensive experience earthquake-strengthening heritage buildings. We would be happy to work on the advisory panel to ensure that the new fund is effective in safely strengthening as many buildings as possible and preserving critical New Zealand heritage.”

The committee made the decision on a 16-3 vote in the confidential section of its agenda on Thursday 19 November. The result was released in the committee minutes, but the report & documents remained confidential.

The contribution is in principle, and up to $15 million from the council’s built heritage acquisition fund, and will be made alongside contributions from theatre owner ReliaNZ Holdings LP, the Government, philanthropic organisations & other potential funders.

Council conditions include an appropriate legal structure for ownership & control, and operational management that ensures continued public access.

Auckland Council will use its built heritage acquisition fund for the first time to refurbish the historic Wong Doo building (1884-85) at the corner of Hobson & Cook Sts and Airedale Cottages (1856) on Airedale St in the cbd.

The battle for the Wong Doo building was itself becoming historic – dating back to 2005, when councillors on the old Auckland City Council made a clear statement that the rules on knocking down old buildings had changed, even if consents for demolition & construction were in place.

The Wong Doo building in 2006, before the first Fiore apartment tower was built beside it.

Dae Ju Developments Co Ltd (now KNZ International Co Ltd, a sister company to the present developer, KNC Construction Ltd) was given the blunt option at a council planning fixtures committee meeting in April 2005: Agree to hold off & consider incorporating existing buildings in the new development, or have the application publicly notified.

Former city planner John Childs, acting for Dae Ju, chose the defer-&-consider option. He’d arrived at the council committee meeting unaware that heritage campaigner Allan Matson had asked the council 3 months earlier to instigate a plan change to schedule the buildings at 152-160 Hobson St, for which Dae Ju won demolition consent in 2004.

Dae Ju had intended to build linked twin apartment towers but, after striking Mr Matson’s heritage campaign, went on to build only the first 18-storey Fiore apartment building. The Korean-owned company was allowed to demolish a row of Edwardian shops to make way for the first 120-unit Fiore on Hobson apartments, and used the Canvas City building as a base for its construction team.

The Wong Doo building – last occupant Canvas City – will return to its dual retail & residential roots, at the foot of the second Fiore apartment building.

KNC Construction Ltd chief executive Ben Lee said the building would add unique character & value to the company’s planned Hobson Fiore II shopping & residential complex: “We did buy the building initially with the intention of pulling it down and starting from scratch, but we are very happy with this joint venture with Auckland Council and what we will be able to offer both residential & retail tenants.”

The Wong Doo building previously held a textile & fireworks business run by Chinese community figure Thomas Wong Doo and was a hub for the local Chinese community in the mid-20th century.

Historic Places Trust’s northern general manager Sherry Reynolds said both the Wong Doo building and the Airedale cottages were an important part of the heritage landscape of Auckland’s city centre: “The Wong Doo building dates back to the 1880s and has particular significance for its strong connections with the Chinese community over the past century through the Wong Doo family.

The cottages at 30-32 Airedale St in 2008.

“The Airedale cottages are also important as rare examples of mid-19th century workers’ housing in central Auckland dating back to the first 20 years of the city’s foundation – which makes them particularly special.

“The Historic Places Trust is pleased that a very positive heritage outcome has been achieved for these 2 heritage buildings, and congratulates the council for its strong leadership both in developing the built heritage acquisition fund and making the decision to invest funds into these 2 very significant buildings.”

The council established the acquisition fund in 2011 to acquire at-risk heritage buildings and other built features that might suffer from destruction by neglect, with the intention of restoring and then onselling them. Under the fund, the council can acquire at-risk buildings, restore them or ensure they are restored, then onsell them with legal protection in place after a short-term hold.

Various buildings in inner-city, suburban & maritime settings are under consideration for support from this fund, which was started with $10 million in 2011 and accumulates a further $2.9 million/year.

Mayor Len Brown said after the council’s parks, recreation & heritage forum made the funding decision this week: “This is an excellent outcome for the first use of the fund. We are saving a piece of Auckland history as part of a project which will inject new investment, retail & residential use into an area which needs revitalisation.”

Forum chairwoman Sandra Coney said the 2 buildings would contribute great character to their neighbourhoods” “They are good demonstrations of the role that restored heritage buildings have to play in providing a rich urban landscape and adding to our quality of life.

“This is one tool the council has to address Auckland’s all-too-common problem of heritage demolition by neglect, when owners don’t have the inclination – or far more commonly, the funds – to restore buildings which are important parts of Auckland’s history.”

The mayor, Len Brown, said he understood the legacy councils’ long-term plans had some budget provision, so he wouldn’t try to increase the budget for heritage protection in the new council’s first budget.

But he wants a report on heritage & strategic acquisition funds which might be set up. That report will go to the committee in a month or 2.

Mr Brown said in his outline: “During the last couple of months we have found ourselves dealing with issues related to heritage buildings with an inability to respond as we may have wished to due to budget constraints.

“There will no doubt be future occasions when this will become an issue for us. In addition, we may need some flexibility to facilitate urban development through short-term property holdings. In preparing this budget, I asked the officers to consider this issue in terms of working capital for purchase & resale of properties for heritage or development purposes.”

One of the arguments against enforced heritage protection is that there’s been no compensation to the property owner for the cost of what becomes a community asset.

That, essentially, was the basis for a move at the Auckland City Council towards financial incentives for heritage protection.

But what council have staff have come up with – and which was endorsed by the council’s city development committee last Thursday – is a long way from that.

Heritage manager Nicola Short told councillors in her report on a heritage policy review: “The current approach to heritage management, as expressed through the district plan, focuses on the identification & description of heritage resources in a discipline-specific manner. There is little or no recognition of the interrelationship between various individual heritage resources, and the management of heritage resources isw undertaken primarily through the district plan.

“A key concept emerging from national & international best practice is that it is vital for an organisation to have an overarching policy principle which recognises the interrelationship & shared values between various elements of the physical environment that have heritage value…. The benefits of this approach are: coherent understanding of the heritage resources, improved communication, streamlined processes for administration & management of assets.”

Out of that and the efforts of a heritage working party, the committee endorsed some elements of an incentives toolkit:

publication of a web-based statement for heritageestablishment of a charitable trust for heritage protection, modelled on the trust established by the Auckland Art Galleryuse of an incentives framework which indicates which tools are applicable to each of the 3 types of heritage item: elements, areas & landscapes (appendix 3 in the report)identification of properties where revaluation is required, due to significant disparity between the current valuation & development potentialthe principle of transferable development rights, where recipient sites are clearly defined, as a means of protecting heritage values, to be investigated in the isthmus, andinvestigation of the costs & covenants associated with rates relief for heritage protection.

The committee agreed the council should fund establishment of a charitable trust, “on the basis that this investment will lead in time to a significant new funding for heritage protection that will not impact on rates, while enabling interested individuals & organisations to make an effective & lasting contribution to heritage protection.

Finance committee chairman Doug Armstrong commented: “There is an element of experimentation in this. It provides a vehicle to get resources into heritage which didn’t exist before. A number of us have sat on hearings where’s it been proposed to plant trees to mitigate something further down the road. A mitigation measure would be a donation to the trust of half a million dollars. I don’t support the business 8 zone restriction (proposed by Cllr Glenda Fryer). The mindset of this heritage group was that we move more towards the carrot and away from the stick, reocognising that the result in the end will be greater for Auckland. That’s the essence of this whole motion – that the wisdom on heritage doesn’t rest with the council, the trust enables us to harness energy out there.”

City planning & treasury staff now have the task of developing a financial incentive package, which could include rates postponement & other types of financial assistance. Ms Short said development of a heritage economics framework would include a full review & investigation of incentives to fund environmental & heritage initiatives.

Transferable development rights have already been used in the city, notably for the re-roofing of St Matthews-in-the City, where the church offered rights to developers of different sites as it required more funding.

A large part of the new heritage framework categorises by themes and sets out categories for assessment criteria – a change of format, but not necessarily an advance for anybody wanting to know how the council might support them in funding work to maintain their home if it’s deemed to be a heritage building.

The section on incentives goes only a little way towards that, outlining the kinds of incentive that might be offered – grants, rebates, rates remission or postponement. The council has offered grants before; the difference here is that a trust would raise & distribute funds, instead of being a cost on rates.

Although the current project is presented as new ideas, some of it clearly dates back to the extensive work on heritage done by council staff 2 years ago. At that time, cost to council was a significant factor in councillor thinking. The answer was to delay action, but the answer now still doesn’t address the issue of who pays where the council deems something to be of heritage value. Nor does it answer the question of destruction by neglect.

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Published 12 September 2007A paper presented to Auckland City Council’s environment, heritage & urban form committee on 7 September sets out 7 incentive options (numbered 1-8, with 3 missing), with pluses & minuses, to encourage property owners to preserve city heritage rather than destroy it for development.

The proposals are in a report by the council’s city heritage chief advisor, George Farrant. The committee agreed:

a report on incentive options should go to the new council’s direction-setting meeting in Novemberways to enhance the council’s transfer of development rights programme should be investigated during the isthmus & central area district plan reviews, andthe use of financial contributions & other measures as a heritage management tool should also be investigated during those reviews.

Councillors also want to discuss with the Government how to stop destruction of heritage buildings by neglect. The recommendation to find ways of intervening where property owners don’t maintain heritage buildings – either deliberately because they want the site for development, or because they don’t have the money to carry out maintenance – was added to the incentives proposal.

Before considering the incentives report, the committee heard a proposal for a heritage places trust from Hobson Community Board member & council candidate Julie Chambers, but largely ignored her ideas. Mrs Chambers, a Citizens & Ratepayers community board representative who’s shifted to the 1Auckland ticket for the council, is standing in the Hobson ward against Action Hobson councillor & committee chairman Christine Caughey.

“Note that financial contributions can be used to increase the costs to a developer of demolishing or altering a heritage site. They will thus act as an economic instrument that may tip the economic balance in some circumstances in favour of alternative development sites, and thus could act as a powerful disincentive.

“By acting in this way they may still be effective, even if no ‘environmental tax’ is collected. This might indicate that undesirable development has been discouraged. The problem remains as to what level of ‘tax’ is appropriate. The loss of heritage cannot be measured in monetary terms but must be measured using more subjective measures.

“The use of environmental compensation has been limited in New Zealand, and thus Auckland City would be taking a pioneering role if the council was to refine the current application of the concept in the isthmus &/or extend it to the other sections of the district plan.

“Although the concept will inevitably be criticised vy some as ‘zoning for sale’, it appears to provide a valuable option for dealing with land use conflicts involving developers & heritage, more particularly in relation to natural heritage & ecology. Often in such conflicts the only real options are destruction or unsatisfactory attempts at mitigation, with a resultant loss in heritage.”

Advantages:

Comparatively low capital cost to the councilOpportunity to work collaboratively with owners to achieve creative solutionsProvides chance to achieve mitigation for reduced score (on heritage scheduling scale) due to changesWill act as a disincentive for marginal developments.

Disadvantages:

Will require plan changes (and thus take longer to introduce)May be open to legal challengeMay be perceived as an easy outIn some cases may require monitoring & management input.

On the use of heritage funds, Mr Farrant said the council offers “the comparatively small sum” of $50,000/year in grants on a contestable basis: “This has meant grants have been on average $5770. The amounts granted have typically represented a very small proportion of both the total project cost & the sum requested. If the fund is increased to $900,000, the average amount can be increased to about $15,000 and the number of grants can be increased to 60/year.”

Advantages:

It’s a tangible carrot to balance statutory sticksIt can achieve good heritage outcomes not possible from regulationIt can encourage increased private investment in the conservation of heritage itemsThe process is highly transparentThe cost can be easily calculated & controlledGrants create goodwill with owners and thus can help avoid costly litigation caused by adversarial relationships with ownersGrants can be linked to actual development &/or maintenance costs.

Disadvantages:

CostDemand for money may exceed the size of the fund, requiring that worthy applications are declinedThe process can become politicalEffective management is resource-intensive.

Mr Farrant said the current transferable development rights programme, in the form of a floorspace bonus, “suffers from a number of weaknesses, in that it is a poorly targeted compensation mechanism which compensates for loss of development potential which may not exist, and the value of the compensation will only coincidentally equate to the cost of conservation.

“As a result, there is the potential for some owners to receive an economic windfall exceeding their ‘loss’ while others will be under-compensated.

“The current value of these rights is low as a result of supply exceeding demand by a considerable margin. Although in general the current TDR programme can be labelled a success, there are a number of opportunities to potentially enhance the programme, such as:

reduce the supply or eligibility for rights by altering the formulaincrease the incentive to use these rights by recipient sites.

Mr Farrant said this could be done by reducing the number of competing floor:area bonuses, &/or the density bonus: “The 2 main ones to consider are the light & outlook bonus, which is prejudiced towards large sites, and the accommodation bonus….. In Sydney, residential use is encouraged by allowing extra floorspace. However, this extra floorspace can only be achieved by purchasing transferable development rights.”

Other development-right possibilities were to change the rules to sale of transferable development rights no longer relied on a development (raising administrative costs), create a transferable development rights bank (but not a true bank, because the council would enter the market as a buyer & seller).

What Mrs Chambers proposed to the committee was:

an independent charitable trust to assist property owners in protecting heritage characterhave a council-appointed board manage it initially, andprovide it with a $4 million start-up fund & administrative support for its first 3 years.

She said it should help with access to expertise in legal protection means, distribute grants and provide best-practice restoration advice.

“Despite a special targeted rate annually taking an additional $1.5 million/year from ratepayers, funds are short…..

“As each heritage case emerges, the council’s 2 major strategies are to either remove property owners’ rights by punitive regulation, or purchase. Both are costly and often impractical.

“Regulatory action imposes new restrictions on owners of older properties and increases the incentive for pre-emptive destruction.”

Published 7 September 2007An Auckland City Council committee wants to discuss with the Government how to stop destruction of heritage buildings by neglect.

The recommendation to find ways of intervening where property owners don’t maintain heritage buildings – either deliberately because they want the site for development, or because they don’t have the money to carry out maintenance – was added to a proposal to devise incentives to heritage property owners.

The environment, heritage & urban form committee also got a proposal for a heritage places during its public forum today, from Hobson Community Board member & council candidate Julie Chambers, but largely ignored her ideas.

The incentive options were set out in a 17-page report by the council’s city heritage chief advisor, George Farrant.

The committee agreed:

a report on incentive options should go to the new council’s direction-setting meeting in Novemberways to enhance the council’s transfer of development rights programme should be investigated during the isthmus & central area district plan reviews, andthe use of financial contributions as a heritage management tool should also be investigated during those reviews.

Auckland City Council has opened its built heritage fund up for the annual applications round. The council offers $50,000/year for restoration projects on homes & larger buildings.

Applications close on Thursday 15 March.

Cllr Christine Caughey, chairman of the council’s environment, heritage & urban form committee, said: “Auckland has some beautiful heritage properties and the council recognises that it can be financially difficult for owners to keep these buildings in superior condition. We’re prepared to help out to ensure that these buildings remain in good condition so they can be enjoyed & appreciated by the community at large.”

Grant criteria include:

Buildings must be of heritage significance and scheduled under the council’s district plan
Proposals must enhance heritage significance through essential repairs & maintenance, assistance for conservation plans, assistance with restoration and enhancement of building faÃ§ades, and
Funding is for immediate use on projects and will not be issued retrospectively.

The 12 recipients last year included the Auckland Sunday School Union building on Queen St, the Onehunga Community House in Selwyn St and the Courtville Apartments in Parliament St.

Auckland City Council has opened its built heritage fund up to applications, with $50,000 available for the year. The fund provides grants to enable property owners to conserve, restore & protect aspects of Auckland’s built heritage.

Among criteria:

buildings must be of heritage significance and currently on the council’s district plan schedule of buildings, heritage properties, places, monuments & objects of special value
proposals must enhance the heritage significance of the item, such as essential repairs & maintenance to buildings, assistance for conservation plans, assistance for restoration and also enhancement of building facades
funding is not retrospective and the project must start after the applicant receives notification that the application has been approved.

3 churches are among the owners of 6 heritage buildings which will benefit from Auckland City Council’s $50,000 built heritage fund in its first year.

The fund is designed to complement private owners’ own restoration & repair work, in recognition of the contribution these buildings make to the overall visual quality of the city.

“Through this fund we hope to support the work that private owners are planning to carry out to restore their own homes or buildings. Auckland City recognises that this work will enhance the overall heritage cityscape and add to the visual quality of our city for all to enjoy,” environment, heritage & urban form committee chairman Christine Caughey said.

buildings must be of heritage significance and currently on the schedule of buildings, heritage properties & places, monuments & objects of special value lists in the district plan
proposals must enhance the heritage significance of the item, such as essential repairs & maintenance to buildings, assistance for conservation plans, assistance for restoration & enhancement of building facades
funding is not retrospective and the project must start after the applicant receives notification that the application has been approved.

“Many of these projects are long-term and involve thousands, if not millions of dollars. Our support for the restoration work is a further step in the overall commitment to protecting Auckland’s built heritage,” Cllr Caughey said.

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